Time To Buy Mylan's Clear Path To EPS Upside, JP Morgan Says

• The share price of Mylan NV MYL has declined 10.51 percent since November 12, when the stock stood at $43.20 at market close.
• JP Morgan’s Chris Schott has reinitiated coverage of the company with an Overweight rating and a price target of $62.
• Schott believes that there could be upside to the stock, driven by a mix of capital deployment, fundamental upside to expectations and multiple expansion.

Analyst Chris Schott mentioned that although there could be “a near-term overhang on MYL shares as the company transitions to a new shareholder base, we see an attractive setup for the story.”

Schott views Mylan as a “top-tier generic operator,” and stated that the company had an attractive pipeline that was capable of driving double-digit organic EPS growth. Schott also believes the company’s underlying generics business continues to be underappreciated, given that commercialization of the generic pipeline could lead to robust organic growth.

According to the JP Morgan report, Mylan has “a significant opportunity with generic Advair, where the company remains on track for an end of year submission and potential 2017 launch.”

The company also has solid generic injectables platform, which is expected to achieve sales of more than $1 billion by 2018.

In addition, the acquisition of Abbott Laboratories' ABT Established Products business “has added scale and diversifies the company’s European and RoW footprint.” Altogether, Schott believes that the company’s platform has the ability to drive mid-single digit top line, as well as double digit organic EPS growth.